General Taxes in Spain

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General Taxes in Spain

The tax year as it affects income tax and other taxes runs from 1 January to 31 December in Spain.

The Spanish government has extensive information on taxes on its Agencia Tributaria website. While most of the site is in Spanish, some information relating to non-residents is in English.

As Spain is divided into 17 autonomous communities, taxes, liability and amounts may vary from one Community to another. The following information is designed to give a rough overview of taxes in Spain.

Value-added Tax (VAT)

Value-added tax (Impuesto sobre el Valor Añadido - IVA) has three levels in Spain.

From 1 July 2010 the levels are:

1. IVA general: Charged on non-essential products and services at 18 percent
2. IVA reducido: Charged on products and services such as tickets, glasses, hairdressers, funeral services and dentists at 8 percent
3. IVA superreducido: Charged on essential items such as bread, milk, cheese, eggs, fruit, vegetables and cereals at 4 percent

Gift Tax

This tax is levied on the increase in wealth associated with a gift from a living donor, taking into account variables such as the Community, the amount and the existing wealth of the beneficiary.

The beneficiary is liable for the tax payment within 30 days of the transfer date.

Car Tax in Spain

Road tax (Impuesto sobre Vehículos de Tracción Mecánica - IVTM) is the annual tax payable on Spanish registered motor vehicles. Pricing depends on the vehicle, its fuel and the municipality in which it is registered.

The person liable for payment of the tax is the owner of the vehicle on 1 January. The payment period is typically between the beginning of March and the beginning of May but periods vary according to location. Payment can be made by direct debit or over the counter in any branch of certain designated banks.

There are discounts available for persons with disabilities.

Non-resident Property Tax in Spain

The non-resident property tax (Impuesto Sobre la Renta de no Residentes) is a tax on rental income for non-Spanish residents. If a property is rented, then income tax must be paid on the gross amount of rental income received at a rate of 24.75 percent (although since 2010, EU residents have been permitted to deduct allowable expenses).

Another tax applies to anyone who owns a property that is not their main home, and, if not rented out, a notional rental income is deemed to arise.  The amount is derived from the cadastral value of the property. This amount can be found on the IBI council tax bill. The tax payable for a non-Spanish resident is 24.75 percent of a taxable amount calculated as 2 percent of the property's cadastral value (found on the IBI bill). This should be submitted using tax form 210.  The same taxable amount applies to residents of Spain, but this is added to other income, and taxed at the scale rates.

The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon Blevins Franks’ understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual must take personalised advice.